Dealing with international transactions is often a matter of great uncertainty. With payments prone to several vulnerabilities, you obviously wouldn’t want to engage in something risky. So, how do you go about your cross-border money transfer needs? The answer is simple- get an International Bank Account Number.
IBANs are standard international numbering systems that support safe and secure overseas transactions. These are ideal for businesses planning to expand overseas, but IBAN can also come in handy when studying or travelling abroad. If you plan to engage in global commerce, this is just the article for you. Here, we will provide a thorough guide on International Bank Account Numbers.
What is an IBAN?
At a primary level, IBAN can be understood as a tool that allows easy identification of the country a specific bank account belongs to when engaging in foreign commerce. However, as a system that supports secure cross-border transactions, IBAN also plays a vital role in verifying transaction details. In addition, with an IBAN account, individuals can manage several currencies simultaneously.
Typically, an IBAN is made up of a two-letter country code, two check digits and a basic bank account number or BBAN. The respective banking associations of each country determine their BBAN. Together, these make up the final IBAN and operate as a country’s bank provider identifier in foreign money transfers.
Types of IBAN accounts:
The IBAN system initially only operated with traditional banks. But, with the advent of modern technology and internet capabilities, individuals can also take advantage of virtual IBAN accounts. Both conventional and virtual IBAN primarily function similarly when it comes to operation. Their major difference lies in the process of opening an account. However, due to convenience and growing popularity, virtual IBAN accounts are widely preferred over traditional ones.
Opening a virtual account:
Unlike traditional IBAN accounts that target high-wealth individuals needing investments, virtual IBANs offer much more flexible options. If you have been considering opening an online IBAN account, here are the steps you must follow.
- Choose A Provider: To open an online IBAN account, you must first choose an account provider. When selecting, take into consideration your unique needs for getting an IBAN. It is also recommended to conduct basic research to pick the best provider regarding fees and features.
- Sign Up: The next step is to sign up for the chosen provider. Although self-explanatory, you must complete an online form and include personal details.
- Provide Accurate Information: When it comes to banking services, it is critical to provide accurate information. However, with IBAN accounts, this makes far more critical. The account opening procedures for IBAN are very rigorous and highly regulated. Any error or misinformation can reject your account application. So remember to provide all the necessary documents in the specified format.
- Verification Procedure: The verification process does not take much time. However, you’d only be allowed to access your account after your details and documentation have been thoroughly verified.
- Fund Your Account: The only step keeping you from using your account is the available fund. You must add funds to your IBAN account to make your account functional. Since virtual IBAN is quite flexible, you do not have to adhere to minimum balance requirements.
If you are a business planning to open an IBAN account, you may have to go through some additional steps. For starters, you’ll have to create a collection account and make a list of each customer. You’ll also have to choose the best payment method for your business.
IBAN makes foreign money transfer a piece of cake. Currently, the system is available for only 82 countries. If your country does not use IBAN, you can consider systems for international transactions.